Retargeting Gains Traction, Part 1

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Re-targeting (also called re-marketing or re-messaging) involves cookie-ing site visitors, tracking their key interactions (such as uncompleted purchases), then serving ads to those visitors related to the same product, or else cross-marketing to them elsewhere on the Web.

A facet of behavioral targeting facilitated by ad networks, retargeting has been around for a while (DoubleClick's ad network offered a retargeting program called Boomerang), but it's been gaining traction among ad agencies only recently, particularly since Q3 of last year. Advertising.com says its LeadBack retargeting program is now a key planning consideration for its advertisers.

Why? The primary reason is because retargeting is a powerful means to bring lift to ad campaign results, generating higher conversion rates and lowering acquisition costs. You can't get much more effective than targeting a person who has shown interest in a product but didn't buy with a related ad that then gets him to buy, right?

Facts About Retargeting

Like all things too-good-to-be-true, retargeting is no panacea. Agencies seeking to implement retargeting must keep some important things in mind:

• Successful retargeting campaigns cannot rely solely on retargeted ad buys; there's simply not enough traffic generated by retargeting alone. 24/7 Real Media advises retargeting max out at 10 percent of a media strategy.
  
  
• Similarly, successful retargeting relies not only on ad-generated traffic, but on all site traffic, from ads, search, email, affiliate marketing, viral, word-of-mouth or otherwise.
  
  
• Critical mass of site traffic is crucial, though none of the networks I spoke with can yet exactly formulize the predictive particulars.
  
  
• Retargeting requires ad network tracking pixels to be placed on the client site. If the retargeting objective involves non-conversions, a pixel must be placed on the order confirmation page as well.
  
  
• Retargeting costs more than average run-of-network buys, but not more than channel-based buys.
  
  
• Retargeting doesn't work for all advertisers. It seems to work particularly well when a purchase involves higher levels of research and consideration.
  
  
• Though proven successful for big brands and e-commerce retailers, retargeting can work for smaller brands, too, though achieving critical mass can be more difficult. Tacoda is working on a new retargeting product to address smaller audiences.
  
  
• Retargeting can augment or supplement other online initiatives, like affiliate marketing or search, which may be tapping out.
  
  
• Limitations like the consumer's buying cycle timeframe and the total reach of an ad network can still hinder the outcome of a retargeting campaign.
  
  
• Cross-marketing or up-selling can also be achieved through retargeting. A common example is the retargeting of a purchaser of airline tickets with hotel and car rental offers.
  
  
• Retargeting can work on-site as well, as 24/7 Real Media describes, "to drive visitors to locations where they previously lingered or came close to buying, or to alert them to special promotions or products that the context of their previous visit suggested might interest them."
  
  
• Additional targeting, such as geo- or demographic targeting, connection speed, etc., can be layered on top of retargeting, but this further limits the size of the audience being served the ad.
  
  
• Frequency capping can be implemented, such as only serving an advertiser's retargeted ad to the same user once within a 24-hour period.
  
  
• Retargeting and behavioral targeting aren't interchangeable. Tacoda's Larry Allen says, "There is quite a bit of confusion in the marketplace between retargeting and true behavioral targeting. We are working very closely with our agency partners to educate them on the differences."
  
  
• Some networks in the retargeting space include: Advertising.com, 24/7 Real Media, TACODA, Burst Media, Claria's Behavior Link, and Undertone Networks. Until recently, most of these networks sold retargeting directly to the advertisers rather than through agencies. Yahoo offers retargeting, too.

In Part Two: Common fallacies and best practices.